Question 1

Investments being held-to-maturity must be accounted for using Amortized Cost under IFRS.

Accepted Answer

A) True 
 B)False

Question 2

Liabilities such as contingent liabilities that are not probable, or are probable but not measurable, do not qualify for recognition in the financial statements.

Accepted Answer

A) True 
 B)False

Question 3

The declaration (but not payment) of common share dividends will have an adverse effect on ROA (Return on Assets).

Accepted Answer

A) True 
 B)False

Question 4

Held-for-sale assets are carried at the lower of amortized cost or estimated net realizable value.

Accepted Answer

A) True 
 B)False

Question 5

The close family of a company's president owns a small (insignificant) amount of the company's shares. The president's family is deemed to be related parties and these holdings should be disclosed.

Accepted Answer

A) True 
 B)False

Question 6

All items in Accumulated Other Comprehensive Income must eventually be recycled to the income statement.

Accepted Answer

A) True 
 B)False

Question 7

Subsequent events are those which occur after the release of the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

Assets must be classified as current or non-current on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

"Reserve for depreciation" is an appropriate alternative designation for "accumulated depreciation".

Accepted Answer

A) True 
 B)False

Question 10

A corporation had the following assets and liabilities: $$\begin{array} { | l | c | l | l | } 
\hline \text { Assets } & & { \text { Liabilities } } & \
\hline \text { Cash } & \$ 2,000 & \text { Accounts pay able } & \$ 2,400 \
\hline \text { Accounts receivable } & 8,400 & \text { Wages payable } & 8,000 \
\hline \text { Inventory } & 7,000 & \text { Interest payable } & 6,000 \
\hline \text { Equipment } & 22,000 & \text { Bonds pay able } & 14,000 \
\hline
\end{array}$$ What is the amount of working capital and the working capital ratio? $$\begin{array} { | l| l | l | } 
\hline& \text { Wrorking Capital Amount}&\text {working Capital Ratio } \
\hline 1& \$ 6,400 & 1.10 \
\hline 2& \$ 1,000 & 1.30 \
\hline 3& \$ 1,000 & 1.06 \
\hline 4& \$ 9,000 & 1.30 \
\hline
\end{array}$$

Accepted Answer

A)  Choice 1 
B)  Choice 2 
C)  Choice 3 
D)  Choice 4 
A)  Choice 1 
B)  Choice 2 
C)  Choice 3 
D)  Choice 4

Question 11

The balance sheet reports on the operations of the company for a given period of time.

Accepted Answer

A) True 
 B)False

Question 12

If the current ratio for a company is 2.5, this means that:

Accepted Answer

A)  the company is able to pay all its debts immediately. 
B)  its current income is 250% of its previous income. 
C)  if the company had $100 of current liabilities, it also has $250 of current assets. 
D)  its debt is 2.5 times the industry average. 
A)  the company is able to pay all its debts immediately. 
B)  its current income is 250% of its previous income. 
C)  if the company had $100 of current liabilities, it also has $250 of current assets. 
D)  its debt is 2.5 times the industry average.

Question 13

ABC Inc's largest customer declared bankruptcy shortly after the company's fiscal year end but well before the financial statements for the last year were issued. The company accounted for roughly 80% ABC's revenues. On the date of bankruptcy, the company owed ABC Inc. $500,000 for purchases it made from ABC Inc during the preceding fiscal year. Given the above, what should the company do from an accounting/financial reporting standpoint?

Accepted Answer

A)  Will not disclose the event and the estimated amount uncollectible in a note to the financial statements. 
B)  Disclose the event as part of management's M, D & A (Management Discussion and Analysis). 
C)  Both disclose the event and the estimated amount uncollectible in a note to the financial statements and accrue for the estimated amount uncollectible. 
D)  No action is required. 
A)  Will not disclose the event and the estimated amount uncollectible in a note to the financial statements. 
B)  Disclose the event as part of management's M, D & A (Management Discussion and Analysis). 
C)  Both disclose the event and the estimated amount uncollectible in a note to the financial statements and accrue for the estimated amount uncollectible. 
D)  No action is required.

Question 14

In order to classify an asset as current, it is to be converted to cash within one year or its operating cycle, whichever is longer.

Accepted Answer

A) True 
 B)False

Question 15

Define liability without using the word "liability".

Accepted Answer

A "liability" is an obligation of an ent

Question 16

On the December 31, balance sheet of a company, current assets included the following items: $$\begin{array} { | l | l | } 
\hline \text { Cash } & \$ 140 \
\hline \text { Accounts receivable } & 240 \
\hline \text { Inventories } & 120 \
\hline \text { Total Current Assets } & \$ 500 \
\hline
\end{array}$$ An examination of the accounts revealed that the accounts receivable balance made up by the following items: $\begin{array}{|l|l|}
\hline \text {Trade accounts receivable}&\$186\
\hline \text { Allowance for uncollectible accounts } & (4) \
\hline \text { Claim against shipper for goods lost in transit (November) } & 6 \
\hline \text { Selling price of unsold goods shipped by the company on consignment at } 130 \text { percent of cost (and not included } &  \
\text { in ending inventory) } & 52 \
\hline \text { Net accounts receivable } & \$ 240\
\hline
\end{array}$ What is the correct amount of current assets as of December 31?

Accepted Answer

A)  $500 
B)  $488 
C)  $448 
D)  $442 
A)  $500 
B)  $488 
C)  $448 
D)  $442

Question 17

Under IFRS, the correct order to present current assets is:

Accepted Answer

A)  Cash, accounts receivable, prepaid items, inventories. 
B)  Cash, accounts receivable, inventories, prepaid items. 
C)  Cash, inventories, accounts receivable, prepaid items. 
D)  There is no required order under IFRS; current assets may be presented by liquidity or reverse liquidity, or in whatever order provides the most benefit to financial statement users. 
A)  Cash, accounts receivable, prepaid items, inventories. 
B)  Cash, accounts receivable, inventories, prepaid items. 
C)  Cash, inventories, accounts receivable, prepaid items. 
D)  There is no required order under IFRS; current assets may be presented by liquidity or reverse liquidity, or in whatever order provides the most benefit to financial statement users.

Question 18

Consider ABC Inc's most recent segment results: $$\begin{array} { | l | l | l | l | } 
\hline \text { Segmen } & \text { Revenues } & \text { Assets } & \text { rofits } \
\hline \text { A } & 2000 & 500 & 500 \
\hline B & 300 & 2000 & 200 \
\hline C & 200 & 500 & 100 \
\hline D & 3000 & 5000 & 300 \
\hline & & & \
\hline \text { Totals: } & \mathbf { 5 5 0 0 } & \mathbf { 8 0 0 0 } & \mathbf { 1 1 0 0 } \
\hline
\end{array}$$ Required:
Which of the above segments would be reportable as per IFRS 8?

Accepted Answer

Revenue test (10%): Segments A and D
Ass

Question 19

Current liabilities are short-term liabilities whose liquidation is reasonably expected to require the use of current assets or the creation of other current liabilities.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a negative element under the "capital assets, tangible" classification?

Accepted Answer

A)  Accumulated depletion of mineral-bearing property. 
B)  Accumulated depreciation of paved parking lot. 
C)  Accumulated depreciation of buildings. 
D)  Reserve for plant expansion. 
A)  Accumulated depletion of mineral-bearing property. 
B)  Accumulated depreciation of paved parking lot. 
C)  Accumulated depreciation of buildings. 
D)  Reserve for plant expansion.

Investments being held-to-maturity must be accounted for using Amortized Cost under IFRS.

Liabilities such as contingent liabilities that are not probable, or are probable but not measurable, do not qualify for recognition in the financial statements.

The declaration (but not payment) of common share dividends will have an adverse effect on ROA (Return on Assets).

Held-for-sale assets are carried at the lower of amortized cost or estimated net realizable value.

The close family of a company's president owns a small (insignificant) amount of the company's shares. The president's family is deemed to be related parties and these holdings should be disclosed.

All items in Accumulated Other Comprehensive Income must eventually be recycled to the income statement.

Subsequent events are those which occur after the release of the financial statements.

Assets must be classified as current or non-current on the balance sheet.

"Reserve for depreciation" is an appropriate alternative designation for "accumulated depreciation".

The balance sheet reports on the operations of the company for a given period of time.

If the current ratio for a company is 2.5, this means that:

In order to classify an asset as current, it is to be converted to cash within one year or its operating cycle, whichever is longer.

Define liability without using the word "liability".

Under IFRS, the correct order to present current assets is:

Consider ABC Inc's most recent segment results: Segmen Revenues Assets rofits A 2000 500 500 B 300 2000 200 C 200 500 100 D 3000 5000 300 Totals: Required: Which of the above segments would be reportable as per IFRS 8?

Current liabilities are short-term liabilities whose liquidation is reasonably expected to require the use of current assets or the creation of other current liabilities.

Which of the following is not a negative element under the "capital assets, tangible" classification?

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

The Statement of Cash Flows

Revenue Recognition

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters

Exam 4: Statements of Financial Position and Changes in Equity; Disclosure Notes

Investments being held-to-maturity must be accounted for using Amortized Cost under IFRS.

Liabilities such as contingent liabilities that are not probable, or are probable but not measurable, do not qualify for recognition in the financial statements.

The declaration (but not payment) of common share dividends will have an adverse effect on ROA (Return on Assets).

Held-for-sale assets are carried at the lower of amortized cost or estimated net realizable value.

The close family of a company's president owns a small (insignificant) amount of the company's shares. The president's family is deemed to be related parties and these holdings should be disclosed.

All items in Accumulated Other Comprehensive Income must eventually be recycled to the income statement.

Subsequent events are those which occur after the release of the financial statements.

Assets must be classified as current or non-current on the balance sheet.

"Reserve for depreciation" is an appropriate alternative designation for "accumulated depreciation".

The balance sheet reports on the operations of the company for a given period of time.

If the current ratio for a company is 2.5, this means that:

In order to classify an asset as current, it is to be converted to cash within one year or its operating cycle, whichever is longer.

Define liability without using the word "liability".

Under IFRS, the correct order to present current assets is:

Consider ABC Inc's most recent segment results: Segmen Revenues Assets rofits A 2000 500 500 B 300 2000 200 C 200 500 100 D 3000 5000 300 Totals: Required: Which of the above segments would be reportable as per IFRS 8?

Current liabilities are short-term liabilities whose liquidation is reasonably expected to require the use of current assets or the creation of other current liabilities.

Which of the following is not a negative element under the "capital assets, tangible" classification?

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

The Statement of Cash Flows

Revenue Recognition

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters